The author is a Forbes contributor. The opinions expressed are those of the writer.

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Aside from some end-of-year tax selling and concerns regarding the fiscal cliff, shares of Apple took a brutal beating towards the end of 2012. The reason – there is a broad belief that the company no longer knows how to innovate. But it’s not true. Instead, what has hurt Apple has been the complete opposite.

The company’s 6-month refresh cycle and avalanche of products seems to have backfired – allowing rivals such as Google and Samsung to steal market share. Apple’s “misdirection” with its disappointing map app didn’t help the situation either. For this, CEO Tim Cook offered an apology.

Consequently, Apple now finds itself in an unfamiliar territory – having to prove itself. Aside from whether or not the company still deserves its status as a market darling, investors want to know what’s next? Apple has the answer – it’s just not saying.

However, for the company to truly move forward as a tech power, Apple should hang-up on the iPhone after one more iteration – presumably the iPhone 6. You might disagree. Granted, the phone is still selling well. However, aside from a different chip and larger screen, the change from the 4S to iPhone 5 was not that significant.

Also, what can Apple add to the iPhone 6 or “5S” that would be appreciably better than the current version? In other words, I don’t think the company wants to go down this line – feeling pressured to excite the Street with each new iteration, especially since margins are beginning to decline. Besides, where will it lead – to the iPhone 10? And then what?

Also, for quite some time, the company has hinted on wearable technology. “It’s time” for the iWatch or its iWear line of devices. This is an area in which Google has already shown interest. And for Apple, this will be the answer to that chronic “what’s next” question. And the company will finally be able to put to rest that other annoying question – can it still innovate?